Three former members of the Financial Oversight and Management Board for Puerto Rico have sued the Trump administration alleging they were illegally fired without cause last month, asking a judge to block the "unlawful and unconstitutional" action.
Retired bankruptcy Judge Arthur J. Gonzalez, Andrew G. Biggs and Betty A. Rosa said in a complaint filed Thursday that their firings in August violated a law mandating that presidents remove members of the Puerto Rico board "only for cause."
The suit seeks a Puerto Rico federal court order declaring the terminations were unlawful and enjoining President Donald J. Trump and his administration from attempting to carry them out.
"Those purported removals were unlawful," the board members said. "They have no basis in law or fact."
The oversight board was created as part of the Puerto Rico Oversight, Management and Economic Stability Act of 2016 to help manage the restructuring of Puerto Rico's $74 billion debt load.
It has been securing court approval of debt plans for Puerto Rico's government and all its independent agencies except the Puerto Rico Electric Power Authority, over which it has repeatedly clashed with bondholders.
In early August, Trump fired five of the board's seven members.
Prior to his termination, Gonzalez was chair of the oversight board. He was first appointed by former President Barack Obama and reappointed by Trump and former President Joe Biden.
Biggs was also appointed to the board thrice, by Obama, Trump and Biden. Rosa was appointed first by Trump and later by Biden.
In addition to Trump, the lawsuit names as defendants Sergio Gor, director of the White House Presidential Personnel Office; and oversight board members John E. Nixon and Robert F. Mujica.
Gonzalez and Rosa, the commissioner of education for New York state, received emails Aug. 1 notifying them that they had been terminated from the Puerto Rico board "effective immediately." Biggs, an expert in Social Security reform, received a similar message on Aug. 13.
The emails provided no justification for the firings despite the Financial Oversight and Management Board members not being removable at will, according to the complaint.
"In violation of the statutory text, Judge Gonzalez, Dr. Biggs, and Dr. Rosa were purportedly terminated without cause, as the emails provided no basis, justification, or authority for the terminations," the members said.
The removals, according to the trio, also contravened a U.S. Supreme Court decision holding that members of the Puerto Rico board are not officers of the United States within the executive branch, meaning the president does not have authority under Article II to remove them.
Allowing the terminations to stand would create a dangerous precedent, they argued.
"The stakes of this case could not be higher: If the president can violate the laws that Congress passed establishing local governments in the territories, he could remove any territorial officer tomorrow," they said in the complaint.
In a statement to Law360, White House spokeswoman Abigail Jackson said, "As the head of the executive branch, President Trump has the lawful authority to remove officers exercising executive power and to make the decisions necessary to successfully run the administration."
Eduardo Santacana, an attorney for the plaintiffs, told Law360 that the case "presents a very important question: whether the president can exert his will over territories that are governed by Congress while ignoring provisions Congress has made for how they should be governed," adding that "Congress has made clear that any firing has to be made for cause."
Santacana also noted that the complaint contained a typo whereby the oversight board was erroneously styled as the "Federal Oversight and Management Board for Puerto Rico."
A spokesperson for the Financial Oversight and Management Board for Puerto Rico declined to comment Monday.
The fired board members are represented by Eduardo E. Santacana, Simona Agnolucci, Eleanor Winter Barczak and Eva M. Spitzen of Cooley LLP, Andrew H. Warren of Democracy Defenders Fund, James I. Pearce, Samantha Bateman and Mary Dohrmann of Washington Litigation Group, and David C. Indiano of Indiano & Williams.
Counsel information for the defendants was not available as of Monday.
The case is Gonzalez et al. v. Gor et al., case number 3:25-cv-01508, in the U.S. District Court for the District of Puerto Rico.
Sep 22
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